AAVE, the second leading player in decentralized finance (DeFi), has experienced a significant surge this year, reaching its highest point since 2022. The token has climbed to $160, marking an impressive increase of nearly 120% from its lowest point this year, bringing its market valuation to over $2.5 billion.

AAVE’s DeFi Total Value Locked (TVL) Soars

The substantial rise in AAVE can be attributed to the notable increase in assets within its network. Current data indicates that the total value locked (TVL) in the AAVE ecosystem has surged to over $12.1 billion. This growth positions AAVE as the second-largest player in DeFi, just behind Lido, which boasts over $25 billion in staked assets, and ahead of competitors like EigenLayer, Ether.fi, and JustLend.

This significant growth has also led to a considerable increase in network fees. According to recent statistics, the total fees generated in the AAVE ecosystem this year amount to over $287 million, making AAVE the third most profitable entity in DeFi after Lido and Uniswap.

Rising Whale Activity

The recent price surge in AAVE has been driven by increased activity from large-scale investors, commonly referred to as “whales.” Several whales have made substantial purchases, and they currently represent a significant portion of AAVE holders, followed by institutional investors and retail traders. Data reveals that while the number of “smart money” investors has slightly decreased, it remains well above the June low of 71, with the total balance held by these investors steady at 439,000 AAVE tokens.

Notably, the largest smart money investor holds over 25,000 AAVE tokens, valued at approximately $4 million, alongside other cryptocurrencies such as Ethereum, Pepe, Ondo Finance, and Beam.

Impact of Federal Reserve Interest Rate Cuts

AAVE has also benefited from the Federal Reserve’s recent decision to cut interest rates. In a recent meeting, the Fed reduced interest rates by 0.50% and indicated that further cuts are likely. Lower interest rates may lead to increased inflows into lending platforms like AAVE and JustLend, further boosting their growth.

Technical Analysis: AAVE Forms Golden Cross

Another factor contributing to AAVE’s rise is its technical performance. The token formed a golden cross pattern in July, where the 50-day and 200-day exponential moving averages crossed. This pattern often signals a bullish trend. AAVE has continued to establish higher highs and higher lows, flipping key resistance at $150 into a support level. It also surpassed the significant point of $153.68, its highest level in March this year. Additionally, AAVE has formed a cup and handle pattern, which is a popular continuation signal.

“$AAVE is trading at the highest level since May 2022 and seems to be breaking out from a 2-year consolidation pattern. Expect ATH reclaim to further solidify DeFi Renaissance.”

As analysts suggest, there is potential for AAVE to continue its upward trajectory as the DeFi market rebounds. If this trend persists, the next critical level to watch will be $170.

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